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Market Direction Is Important –
Updated Chart of the S&P 500 and Secondary Signals
Of our Four secondary indicators under our MTI:
Relative Strength Index (RSI)-Positive
Chaikin Money Flow (CMF)-Positive
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks capped off a week of light trading volume by posting modest gains, with the S&P 500 up .2% for week, after a mild selloff on Friday on the lowest volume since last December.
This week data will be released on durable goods, new home sales, pending home sales, and GDP.
The Conference Board’s Leading Economic Index rose .7% in April, suggesting that the economy is expanding after weak growth in the first quarter: “April’s sharp increase in the LEI seems to have helped stabilize its slowing trend, suggesting the paltry economic growth in the first quarter may be temporary. However, the growth of the LEI does not support a significant strengthening in the economic outlook at this time. The improvement in building permits helped to drive the index up this month, but gains in other components, in particular the financial indicators, have been somewhat more muted.”
In a speech on Friday, Fed Chair Janet Yellen reiterated comments that the Fed is on track to raise rates this year, stating that “if the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy. To support taking this step, though, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term”.
A June rate hike is “unlikely”, according to the minutes from last month’s FOMC meeting. While “a few” officials thought the economy would show enough strength to warrant a June increase, “most” Fed officials “thought it unlikely that the data available in June would provide sufficient confirmation that conditions for raising the target range for the federal funds rate had been satisfied, though they generally did not rule out this possibility”.
Only one in four workers worldwide has a secure job, according to a report from the International Labour Organization. According to the ILO there is an increasing global shift away from reliable full time work and a trend towards temporary contracts and irregular hours, leading to “widespread insecurity” among workers worldwide.
Last week the Los Angeles city council moved to increase the city’s minimum wage to $15 per hour by 2020, joining a growing list of cities and states moving past the federal minimum wage. Twenty nine states, along with the District of Columbia and close to two dozen cities and counties have set their own minimum wage.